A new Government subsidy on roller meal, which will halve the retail price of a 10kg pack to $50, will be seen on shop shelves over the next few days.
The subsidy, paid only on roller meal and announced in the National Budget, replaces a previous set of measures that effectively subsidised the actual maize grain supplied to millers, through import subsidies or at the level of the Grain Marketing Board (GMB). The new subsidy is only on the basic roller meal product. The past subsidy system subsidised all maize products, including super-refined maize-meal.
Market prices still prevail in the procurement process to ensure availability with the subsidies on roller meal kicking in at the end. Steps have been taken to ensure the GMB can supply adequate quantities of maize to millers.
The timing and extent of the new subsidy on roller meal was announced by Finance and Economic Development Minister Professor Mthuli Ncube in a statement yesterday.
Millers said it would take three to five days to clear old unsubsidised stock before the new subsidised roller meal reached the shelves.
The delay between the ending of the old subsidy and its replacement by the new targeted subsidy saw roller meal prices rocket almost a fortnight ago to around $100 for 10kg. President Mnangagwa reacted swiftly and ordered last week that the subsidy on basic maize meal had to be put back in place.
Detailing the new subsidy yesterday, Minister Ncube said: "As you may be aware, His Excellency the President, Cde E.D. Mnangagwa announced that subsidies on maize have been restored in order to cushion the vulnerable groups of our society from the negative impact of increases in basic food prices.
"Under this new subsidy model, Government will fund the procurement of grain at market prices and selling the same to registered maize millers to ensure availability and affordability of the commodity.
"This model will create fiscal space for Treasury to finance other protection programmes. Government will ensure that the requisite monthly tonnage of 40 000 tonnes required for producing 32 000 tonnes of roller meal will be timely availed by GMB to members of the Grain Millers Association of Zimbabwe (GMAZ).
"In this regard, the new subsidy model will therefore target the production of roller meal, resulting in the price of ZWL$50 for a 10kg bag."
The switch from general subsidies, often funded through the supply of cheaper foreign currency for imports, to tightly targeted and budgeted subsidies for basic food consumed by the most vulnerable groups, was part of a raft measures announced by Minister Ncube in his 2020 National Budget proposals.
Besides the roller meal subsidy, there will be a subsidy for the basic loaf of bread and for cooking oil.
This switch means flour used for luxury products, such as cakes, and flour used for fancy loaves will not be subsidised.
GMAZ chairman Mr Tafadzwa Musarara praised the Government for introducing the subsidy, saying its effect would start reflecting soon.
"Prices are expected to go down in five days from now as shops are still clearing old stock," he said.
"The Government of Zimbabwe and the milling industry represented by Grain Millers Association of Zimbabwe have for the past few days been having intense engagement with discussion around the introduction of subsidies on roller meal.
"This is a relatively new subsidy regime that is coming into the country and it is targeted on a particular product which is roller meal. As you are all aware, this is again pursuant to the provisions carried in the 2020 Budget where the Government is committed to subsidising bread and roller meal and as millers we are responsible for the production of roller meal."